The Brexit could shake up the UK media industry

Sir Martin Sorrell, CEO at WPP, delivers a keynote speech at the Mobile World Congress in Barcelona Thomson Reuters This story was delivered to BI Intelligence "Digital Media Briefing" subscribers. To learn more and subscribe, please click here.

The U.K. has voted to leave the European Union last week, which threw the global market into panic and created a sense of uncertainty about the future of Europe.

It's unclear if the Brexit will have any specific effects on the digital media industry in the short or long term, but there are numerous potential consequences already on the table.

Earlier this month, Group M, the global media arm of WPP, tweaked its TV and newspaper ad spend forecast to compensate for a potential Brexit, according to The Guardian. Previous forecasts said U.K. TV ad spend would grow 7.1% in 2016, but that number drastically reduced to 2.6%. Furthermore, Group M lowered its total U.K. ad spend growth estimates from 7.2% to 6.3%.

This decrease stemmed from ad buyers' hesitation to spend money in the weeks before the referendum. Had the U.K. voted to remain in the EU, the ad market likely would have stabilized. But a vote to leave would have placed more downward pressure on U.K. ad spend, according to Sir Martin Sorrell, the CEO of WPP.

But even with these adjustments, the estimates still place the U.K. as one of the fastest-growing ad markets.

The U.K. is a major content creator for Europe, as it sells approximately $520 million worth of shows to the EU market, The Guardian reports. But entertainment production in the U.K. reaped many benefits from the EU's Media Program, which supplied $45 million in 2014 and 2015. Without this money, creators could move elsewhere to make their content.

The EU also has strict content quotas that state a certain percentage of TV content on a European channel must come from a European market. Before the Brexit, the U.K. fulfilled that standard, but that might change once the U.K. officially leaves the EU, likely within the next two years. This could limit the number of distribution deals that U.K. content creators can make with European networks, reports Variety.

The U.K. currently has data sharing laws that comply with the EU; however, new laws under the General Data Protection Regulations that determine how and when technology companies can collect user data and what they can do with that data should take effect in 2018. Still, many expect the U.K. will remain compliant with the EU's new data regulations even if they depart the EU before 2016, according to The Register.